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Investing spare change with Raiz Invest

By Digital News Asia March 11, 2019

Aims to increase the number of new mutual fund investors to 400,000 by 2020

The Raiz app works by collecting users’ spare change from their spending

FOR most Indonesians, investing is often misunderstood as something that requires large amount of money to start with. According to data from Central Bureau of Statistics (BPS), as per May 2018 there are 190.5 million people aged 15 and above in Indonesia. Out of this number, only 17.8%, or approximately 33.9 million people have at least one bank account. Moreover, based on Indonesian Central Securities Depository (KSEI) data, the number of mutual fund investors in Indonesia stood at mere 820,000 as per July 2018.

“Little did people know that they can actually start investing from very small amount of money, without affecting their lifestyle,” said Melinda N. Wiria, chief executive officer of Raiz Invest Indonesia.

“Let’s take spare change people have from their daily spending every day. Usually people simply throw their spare change into a jar or a piggy bank, only to find - much to their surprise - that over time they can accumulate quite a significant amount of money. Investing spare change, in other words, allow people to realise their dreams.”

With the Raiz app, people can now collect spare change and automatically invest it in capital markets.

Launched as Acorns in Australia in February 2016, the app has been rebranded as Raiz Invest in April 2018. As of January 2019, the Raiz app in Australia has been downloaded more than one million times and has more than 175,000 monthly active users.

The Raiz app works by collecting users’ spare change from their spending. When they sign up with Raiz, users can link their debit cards and/or e-wallets.

Whenever a user spends from those debit cards or e-wallets, Raiz will roundup each transaction amount to nearest IDR5,000 and once the accumulated roundup amount hit the threshold of IDR10,000, that amount will be automatically invested into mutual funds.

Besides the automatic investment generated from transaction roundups, users can also invest regularly using the recurring investment feature or in lump sum to increase the value of their Raiz investment account.

“In Australia, Raiz has become a game changer especially for millennials in building an investment habit. The app is perfect for those who know little about investing or don’t know how to start.

“It’s about levelling the playing field and opening market up, particularly to younger generations. It is also about educating people about the benefits of small yet regular investment into the market,” stated Raiz Invest Australia chief executive officer George Lucas.

Raiz is coming to Southeast Asia with Indonesia as the country of choice for its first expansion to the region. In Indonesia, Raiz Invest positions itself as an aspirational product to improve by hands on learning financial literacy and financial inclusion.

“We are very excited to bring Raiz Invest to Indonesia. We believe that just like in Australia, Raiz will be a game changer on how people invest. Raiz Invest will be the innovative solution for anyone who wants to start investing, but never really take the first step,” said Lucas.